The Gillette Company and another v LA-Laboratories Ltd Oy

Article 6(1)(c) of Directive 89/104 limits a trade mark proprietor’s right to prevent the unauthorised use of its mark in the course of trade by third parties, where the use of the mark by a third party is “necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts; provided that he uses them in accordance with honest practices in industrial or commercial matters”.

In a recent judgment, the European Court of Justice (ECJ) has re-affirmed and expanded upon the criteria that a defendant must satisfy if it is to avail itself of Article 6(1)(c). The ECJ also clarified the position where the goods in question may be said to be “accessories or spare parts”.

Background facts

The Gillette Company is the proprietor of the trade marks ‘Gillette’ and ‘Sensor’ for products falling within Class 8 of the Nice Agreement[1] including (amongst other things) razors. Gillette Group Finland[2] holds the exclusive right to use these marks in Finland, and has marketed razors there which consist of a handle and a replaceable blade together with the blades on their own.

LA-Laboratories also markets such razors and blades in Finland, under the mark ‘Parason Flexor’. The packaging of the blades sold under this mark includes a sticker which states that “All Parason Flexor and Gillette Sensor handles are compatible with this blade”. The order for reference showed that the use of the marks ‘Gillette’ and ‘Sensor’ by LA-Laboratories was not authorised by Gillette.

Gillette brought proceedings against LA-Laboratories in Finland for infringement of the ‘Gillette’ and ‘Sensor’ trade marks, and LA-Laboratories sought to rely on the exception to the principle of trade mark owner exclusivity where the mark is used by the third party for goods that could be described as ‘spare parts’, as enshrined in Article 4(2) of the Finnish Law on Trade Marks (tavaramerkkilaki).

Gillette were successful at first instance, where the Court interpreted the spare parts exception as not applying to the “essential parts of a product”, but this was overturned on appeal by the Court of Appeal of Helsinki which gave the exception a much wider interpretation. Accordingly, Gillette appealed to the Finnish Supreme Court (Korkein oikeus), which took the view that the case raised questions as to the correct interpretation of Article 6(1)(c) of the Directive. Accordingly, five questions were referred to the ECJ.

The questions referred and the ECJ’s response

Questions 1 to 3

The first three questions sought clarification of the meaning and effect of the words “accessories or spare parts” in Article 6(1)(c), and the correct interpretation of the requirement that the use must be “necessary” to indicate the intended purpose of the product:

1)What are the criteria

a) on the basis of which the question of regarding a product as a spare part or accessory is to be decided, and

b) on the basis of which those products to be regarded as other than spare parts and accessories which can also fall within the scope of the said subparagraph are to be determined?

2) Is the permissibility of the use of a third party’s trade mark to be assessed differently, depending on whether the product is like a spare part or accessory or whether it is a product which can fall within the scope of the said subparagraph on another basis?

3) How should the requirement that the use must be “necessary” to indicate the intended purpose of a product be interpreted? Can the criterion of necessity be satisfied even though it would in itself be possible to state the intended purpose without an express reference to the third party’s trade mark, by merely mentioning only for instance the technical principle of functioning of the product? What significance does it have in that case that the statement may be more difficult for consumers to understand if there is no express reference to the third party’s trade mark?”

The ECJ answered these three questions together. It held that use of the trade mark by a third party who is not its owner is “necessary” in order to indicate the intended purpose of a product marketed by that third party where such use in practice constitutes the only means of providing the public with comprehensible and complete information on that intended purpose in order to preserve the undistorted system of competition in the market for that product.

The UK Government and the Commission of the European Communities had made observations that Article 6(1)(c) should not be limited to spare parts and accessories. The ECJ accepted this, holding that since Article 6(1)(c) makes no distinction between the possible intended purposes of products when assessing the lawfulness of the use of the trade mark, the criteria for assessing the lawfulness of the use of the trade mark with accessories or spare parts in particular are thus no different from those applicable to other categories of possible intended purposes for the products.

The ECJ went on to say that it is for the national Court to determine whether, in the case in the main proceedings, such use is necessary, taking account of the nature of the public for which the product marketed by the third party in question is intended.

Question 4

The fourth question raised the issue of honest commercial practice, which the ECJ has previously considered in different contexts in a number of cases:

What factors should be taken into account when assessing use in accordance with honest commercial practice? Does mentioning a third party’s trade mark in connection with the marketing of one’s own product constitute a reference to the fact that the marketer’s own product corresponds, in quality and technically or as regards its other properties, to the product designated by the third party’s trade mark?

The ECJ reaffirmed the “consistently held” principle that the condition of ‘honest use’ within the meaning of Article 6(1)(c) constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner. It went on to set out a number of (presumably non-exhaustive) examples where the use of the trade mark will not be in accordance with honest practices in industrial and commercial matters:

- if it is done in such a manner as to give the impression that there is a commercial connection between the third party and the trade mark owner (following the BMW case[3] para 51);

- if it affects the value of the trade mark by taking unfair advantage of its distinctive character or repute (BMW para 52);

- if it entails the discrediting or denigration of that mark (this example was raised by the UK Government and Commission in their observations); or

- where the third party presents its product as an imitation or replica of the product bearing the trade mark of which it is not the owner.

Further, the ECJ held that the fact that a third party uses a trade mark of which it is not the owner in order to indicate the intended purposes of the product which it markets does not necessarily mean that it is presenting it as being of the same quality as, or having equivalent properties to, those of the product bearing the trade mark. Whether there has been such presentation depends on the facts of the case, and it is for the referring Court to determine whether it has taken place by reference to the circumstances. Moreover, whether the product marketed by a third party has been presented as being of the same quality as, or having equivalent properties to, the product whose trade mark is being used is a factor which the referring Court must take into consideration when it verifies that the use is made in accordance with honest practices in industrial or commercial matters.

Question 5

Finally, the fifth question raised an interesting point as to the position where the third party markets the ‘base’ product as well as spares parts or accessories for that product:

Does it affect the permissibility of the use of a third party’s trade mark that the economic operator who refers to the third party’s trade mark also markets, in addition to a spare part or accessory, a product of his own with which that spare part or accessory is intended to be used with?

Here, the ECJ simply held that in such circumstances, use of a third party’s trade mark falls within the scope of Article 6(1)(c) in so far as it is necessary to indicate the intended purpose of the product marketed by the ‘economic operator’ using the third party trade mark, and provided the use is made in accordance with honest practices in industrial and commercial matters.

Conclusions

This case is the latest in a line[4] where the ECJ has explicitly sought to strike the correct balance between the exclusive rights of the trade mark owner, as set out in Article 5 of the Directive, and freedom of third parties to provide goods and services in the common market. The clarification of the “spare parts and accessories” wording in Article 6(1)(c) is to be welcomed, as is the clear exposition of the criteria for ‘honest use’, which appears to be consistent with Directive 84/450/EEC on misleading advertising. However, there is considerable scope for debate as to where the use by a third party of another’s trade mark can really be said to be the “only means of providing the public with comprehensible and complete information on that intended purpose”, and it remains to be seen how this aspect of the judgment will be interpreted by national courts.